The Jakarta Corruption Court sentenced Syafruddin Tumenggung, the former head of the Indonesian bank bailout agency that led the country out of the 1998 financial crisis, to 13 years in prison on Monday for manipulating a commercial bank’s credit status.

Syafruddin, the former chairman of the Indonesian Bank Restructuring Agency (IBRA), was found guilty of issuing a letter in 2004 for Sjamsul Nursalim, the owner of Bank Dagang Negara Indonesia (BDNI), freeing him from repaying a debt owed to the government and thereby causing Rp 4.58 trillion (US$308 million) in state losses.

“The defendant is ordered to pay Rp 700 million in fines or face an additional three months in prison,” said presiding judge Yanto as he read out the verdict.

Syafruddin has stated that he will file an appeal.

The case dated back to the 1998 Asian financial crisis when BDNI received Rp 28 trillion in Bank Indonesia liquidity support (BLBI) funds, which were disbursed by the government through the central bank to help them cope with massive runs during the crisis.

It was later found that 95 percent of the Rp 144.5 trillion of BLBI funds disbursed to 48 commercial banks, including BDNI, had been embezzled.

During the trial, it was revealed that Syafruddin, who was appointed IBRA chairman in 2002, sent a letter to then-coordinating economic minister and Financial System Stability Committee (KSSK) chairman Dorodjatun Kuntjoro-Jakti in February 2004 recommending the KSSK write off some of Sjamsul's debt, claiming the decision was based on a Cabinet meeting led by then-president Megawati Soekarnoputri.

Dorojatun later issued a KKSK decree in accordance with Syafruddin's recommendation, while in fact, the two officials, who had attended the Cabinet meeting, knew that the meeting had never concluded or approved the writing off of the debts, according to prosecutors.

Corruption Eradication Commission (KPK) prosecutors also found that Syafruddin had cooperated with Sjamsul and his wife, Itjih S Nursalim, as well as Dorodjatun in the graft case.

The sentence is lighter than that sought by the KPK prosecutors of 15 years in prison and Rp 1 billion in fines. (sau)